SMU Data and Models

Steel Mill Negotiation Rates Remain Favorable to Buyers

Written by Brett Linton

September 15, 2022

The percentage of buyers reporting that mills are negotiable on new order pricing grew this week. According to our latest steel market survey this week, the majority of the steel executives polled reported that mills are willing to talk price to secure an order. A high willingness to negotiate has been evident in each of our checks since early May.

SMU surveys hundreds of steel buyers every other week with the question: Are you finding domestic mills are willing to negotiate spot pricing on new orders? On average this week, 86% of steel buyers reported that mills were willing to negotiate lower prices on new orders. This rate is up from 85% in early September and up from 77% in mid-August. Negotiation rates are down compared to the 88–89% levels seen in July and early August. Recall we saw negotiation rates as low as 16% in March.

As one buyer commented that mills are “negotiable for large orders,” another remarked they are “holding tight on not letting spot prices slide.”

Broken down by product, 76% of hot rolled buyers surveyed are now responding that mills are willing to negotiate lower prices, down from 86% two weeks prior and down from 79% one month ago. Negotiation rates were in the 92–94% range in the July and early-August surveys.

For cold rolled, 94% of buyers polled reported that mills were willing to bargain, up from an 82% rate two weeks ago. 91% of galvanized buyers reported that mill prices are negotiable, up from 85% two weeks prior, but down from the 92–93% rates seen in recent months.

Galvalume negotiation rates tend to be more volatile due to the smaller market size, with 100% of respondents reporting mills are negotiable this week, unchanged from two weeks ago and up from a 67% rate in mid-August.

Negotiations have been slightly less common in the plate market but have been rising since mid-July. 80% of buyers reported a willingness to negotiate this week, unchanged from two weeks prior and up from 64% one month ago. Plate negotiation rates had been between 54–67% for nearly two months prior to September. Recall we saw plate negotiation rates of 0–18% in March and April.

SMU’s Price Momentum Indicator was adjusted from Lower to Neutral on Aug. 9 and will remain there until the market establishes a clear direction.

Note: SMU surveys active steel buyers twice each month to gauge the willingness of their steel suppliers to negotiate pricing. The results reflect current steel demand and changing spot pricing trends. SMU provides our members with a number of ways to interact with current and historical data. To see an interactive history of our Steel Mill Negotiations data, visit our website here.

By Brett Linton, Brett@SteelMarketUpdate.com

Brett Linton

Brett Linton is a senior analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.

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